Medicaid was created at the same time as Medicare, but the structure of the program has made it uniquely more dependent on state-level cooperation.
The Social Security Amendments of 1965 created Medicare to serve as a federal health insurance, mostly for seniors. To serve as a health safety net, the law also created Medicaid and the Children’s Health Insurance Program (CHIP) to cover low-income Americans.
While Medicare is administered almost entirely at the federal level, Medicaid and CHIP are run at the state level with significant federal funding to support the cost of the program, usually hovering between 50 and 78% of the total cost. The is the reason why different states give their Medicaid programs different names, from BadgerCare in Wisconsin to TennCare in Tennessee.
However, the state-level administration of the program also meant that eligibility requirements to have Medicaid varied from state-to-state. Many advocates and policy analysts took issue with low income thresholds that excluded large swaths of the low-income population. Consider the following
Ultimately, two-thirds of states limited parental eligibility to less than 100% of the current poverty level (11
), with individual states such as Alabama limiting the parental eligibility to as low as 23% of the federal poverty level in 2013 (10
). Individuals without children have typically been ineligible for Medicaid coverage regardless of income, with only 9 states providing non-Medicaid, state-funded benefits to childless adults in 2009 (12
Healthcare is an expensive affair, and health insurance is crucial to affording a variety of medical services from preventative screenings to procedures and drugs.
With high private insurance costs and state-level eligibility requirements many times being too low for millions of Americans to get coverage, the ACA expanded Medicaid eligibility for low-income Americans at or below 138% of the FPL.
To make the expansions easier on state budgets, the ACA outlined
that the federal government would pay for 100% of the cost of new Medicaid enrollees from 2014-2016 and reduce contribution gradually until 2020. After 2020, the ACA promised the federal government would continue to fund 90% of the expansion cost for all following years.
Following the passage of the ACA, a coalition of states sued the Department of Health and Human Services on the constitutionality of various provisions of the ACA. The Supreme Court ruling
on National Federation of Independent Business v. Sebelius
in 2012 changed the implementation of the ACA radically.
One of the most important changes for our discussion is that the court ruled the Medicaid expansions were overreach of Congress’ authority. As a result of the ruling, the states themselves had to choose to adopt the expansions through state-level executive action, referenda, or law.